Procaccianti Hotel REIT Updates Asset Values

While Class A shares saw a notable decline, the REIT reaffirmed valuations for key investor share classes.

June 30, 2025

Updated NAVs Show Stability in Key Classes

Procaccianti Hotel REIT has recalibrated its estimated per share net asset values (NAVs) across multiple share classes, delivering an updated snapshot of where things stand as of March 31, 2025. For shareholders, especially broker-dealers handling customer account reporting, these numbers are essential for keeping up with the latest view on valuation.

Let’s start with the big picture. The NAVs for Class K and K-I shares came in at $10.17 per share —the same as last year. That kind of consistency is notable in a market where real estate values are constantly influenced by inflation, interest rates, and broader economic pressures. On the other hand, Class A shares dropped to $7.14 per share, down from $9.82, showing how different classes can move in response to their place in the capital stack. Class B shares remained at $0.00, unchanged from previous years.

How the Values Were Calculated

Behind the NAVs is a comprehensive valuation process. The Company engaged Robert A. Stanger & Co. to appraise all five properties in the REIT’s portfolio. Total appraised value: $109.1 million. That’s an 11.8% lift over the original cost plus capital improvements.

Factored into this were current market-based assumptions:

Terminal capitalization rate: 9.02% (weighted average)

Discount rate: 10.48% (weighted average)

Income and expense growth rate: 3.0%

Those numbers were used not just for real estate, but also for debt. Stanger estimated the fair value of the REIT’s secured notes at just over $64.8 million, applying a weighted average discount rate of 5.94%. Combined with other assets and liabilities, the Company’s net asset value came out to $59.2 million, down slightly from $60.7 million in 2024.

What It Means for Shareholders

These NAVs have downstream effects. The Distribution Reinvestment Plan (DRIP) pricing has been updated—shares in the plan will now be offered at $9.66 for both Class K and K-I. The same NAVs will drive pricing in the Company’s share repurchase program , depending on each shareholder’s holding period and situation.

Board Oversight and Advisory Agreement Renewal

Procaccianti’s Board, backed by its independent audit committee, reviewed all third-party valuation reports and formally signed off on the NAVs. They’ve also renewed the advisory agreement with Procaccianti Hotel Advisors through August 2026, keeping the existing management structure in place for another year.

What to Watch Going Forward

As always, NAVs are estimates based on a defined methodology and set of assumptions. They don’t represent liquid market prices or audited GAAP values. But for those tracking their investment in the REIT, this update provides a grounded, timely view into what the underlying assets are worth—and what shareholders can expect moving forward.